Kate Andrews Kate Andrews

Why Liz Truss u-turned over public sector pay

(Credit: Getty images)

That was quick. Less than 15 hours after pledging a robust reform of public sector pay, Liz Truss has performed a u-turn on plans to bring national pay bargaining to an end. It comes after criticism mounted that slashing pay for new frontline staff was not the most obvious way to handle an escalating cost-of-living crisis.

In a sense, it’s a crime of poor timing rather than poor policy. National pay bargaining has long been questioned as a fair way to compensate staff on the government payroll. In part it’s due to the reasons laid out by Truss: there are obvious differences in the cost-of-living throughout the country, which might justify a rethink (housing being a key factor). But there are far more sympathetic reasons too: areas lacking in specific staff could gain the ability to offer more pay, to recruit those skills and services for locals. Furthermore, more focus on performance-related pay would help retain and reward the top public sector performers while making efficiencies across the board.

Truss’s flirtation with national pay bargaining reform is nothing new

But this is not the time to have that argument. Even during economic downturns, public sector pay can often be up for discussion because of the job security that comes with the roles (whereas private sector workers tend to be more at risk of losing their jobs). But in this extremely tight labour market, it’s hard to make the case that public sector workers have significantly more security. Furthermore, the average worker is looking at a below-inflation pay rise, with many starting to question how they’ll make good on their bills this winter. If one had to pick the most politically tricky moment to make this argument, this would be it.

It speaks to a bigger concern about Truss’s economic campaign.

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